A zkSync Era revenue aggregator protocol rug pulls ~$2.4 million

Kannagi Finance, a revenue aggregator protocol in the zkSync Era, has recently shut down its official website and social media accounts, causing concerns among users who fear a rug pull. 

Just a day before its disappearance, the protocol had a Total Value Locked (TVL) of $2.13 million. However, at the time of this report, the TVL had plummeted to nearly zero, resulting in an approximate loss of $2.4 million for users.

However, in a recent announcement, the protocol was confirmed to have been audited by two audit firms before the incident. The two audit firms are SolidProof and SourceHat (formerly Solidity Finance). The audit completion announcements from the two firms, SolidProof and SourceHat, were made on June 6 and June 27 respectively. 

Following SolidProof, a firm under the German company Make Network, said that indeed the audit for the ERC20 Token was done by the firm. However, the Vault, which was not verified on-chain, was audited by SolidityFinance (now SourceHat).

In a statement addressing the incident, SolidProof said it has partnered with KyberNetwork to thoroughly investigate the situation. Additionally, the firm clarified that Kannagi Finance did not perform KYC with them. SolidProof can be reached directly for any concerns, the team said.

According to SolidProof, the fraudster could be an individual in the Chinese region. “We will continue to track the wallets and take further steps,” the audit firm said.

At the time of writing, its counterpart audit firm SourceHat has not responded to the situation.

Read also; 

U.S. Reps. Question Apple’s App Store Guidelines Impact on Emerging Technologies

What do you think of this article? Share comments below.